Labour Studies Index

Updated: 2022-05-16

Do Employees Profit from Profit Sharing? Evidence from Canadian Panel Data

Document type Article
Author Long, Richard J.
Author Fang, Tony
Journal Industrial and Labor Relations Review
Volume 65
Date 2012
ISSN 0019-7939
Pages 899-927


Using panel data from a large sample of Canadian establishments, the authors examine whether there is any link between adoption of an employee profit-sharing plan and subsequent employee earnings. Overall, growth in employee earnings during the five-year period subsequent to adoption of profit sharing was significantly higher in establishments that had adopted profit sharing, as compared with those establishments that had not done so. Employees in establishments that paid high wages before profit sharing adoption appeared to benefit more than employees in other establishments, although employees in other establishments did eventually benefit from profit sharing.